Thursday, June 25, 2009

RICS outlines its expectations from the upcoming budget

 

I have attached the updated version (please ignore earlier one) expectations from the upcoming budget from RICS – Royal Institution of Chartered Surveyors. These can be attributed to Mr. Sachin Sandhir – MD & Country Head – RICS India. The focus is on real estate & construction sector.

 

RICS outlines its expectations from the upcoming budget

 

Government’s explicit focus on housing and infrastructure is bound to benefit the real estate and construction sector in one way or the other. RICS believes that the Ministry of Finance would consider the proposals submitted by the Housing Ministry and increase the housing loan interest deduction limit to Rs 2.5 or Rs 3 lakhs p.a. along with lowering interest rates to 7.5% for loans in the range of Rs 5 lakh to Rs 30 lakh. Given the president’s aggressive target to make India slum free in five years, it would be imperative to provide fiscal concessions for building low cost houses

 

·         A dedicated fund for affordable housing

·         Reintroduction of concessions under Section 80IB (10) of the Income Tax act (available until 2007), thereby encouraging construction of small units at affordable prices. This provision would allow deduction at 100% of the profits from a housing project that fulfills special conditions such as minimum plot area of one acre and maximum built-up area of 1,000 sq.ft for Delhi or Mumbai and 1,500 sq.ft for other places.

·         Waiver or reduction in stamp duty, value added taxes and other government taxes for economically weaker sections (EWS) and lower income group (LIG) housing

·         Restoration of tax holidays for low-cost housing projects

 

As the industry’s wish list is multi-fold, other announcements likely to bring joy to the sector are:

 

·         Further relaxation of ECB and FDI norms

·         Rationalization of stamp duty and registration charges

·         Confirmation on abolition of service tax on renting immovable property, already announced by the high court

·         Clarity on extension of tax waiver for STPI units

·         Extension of tax holiday under Section 80-IA (4) (iii) for developers who build industrial parks, which in turn would boost the otherwise impacted IT industry

 

Although we hope that levy of fresh taxes, which could adversely impact the sector are avoided, according to government sources, chances of the service tax increasing back to 12%, cenvat rate reversing to 10% and excise duty on steel and cement being brought back to 12%, are high. We understand that the finance minister’s task to balance between industry requirements and widening fiscal deficit will be challenging and trust that the decision would be taken after a careful consideration of all aspects.

 

From a more generic perspective, common expectations across industries include – abolition of fringe benefit tax (FBT), reduction in central sales tax, single unified Goods and Services Tax (GST) and reduction in corporate tax rate from the current rate of 33% to about 26%, in line with the global practices. However, barring FBT and single GST rate being considered at 12%, the remaining rebates seem unlikely to materialize, given the government’s shrinking revenue collection.


About RICS

RICS is the world’s leading professional body in land, property and construction with over 150,000 members in more than 146 countries practicing in 17 specializations. RICS is governed by a Royal Charter approved by the UK Parliament which requires it to act in public interest rather than simply advancing the interests of its members. To this end, RICS has developed and operates high standards of entry to the profession together with a continuing commitment to maintain and advance the highest technical, professional and regulatory standards covering all aspects of property, construction and associated environmental issues. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice to governments and policy-makers on key issues affecting businesses and society. 


For further information contact:

Sunaina Jairath                                                                   Anant Rastogi                 

Image Inc.                                                                             RICS India                       

Tel No. – 011-46523456                                                    0124 - 4626028             

Mobile - +91 – 9811645243                                              9818670077                       

E-mail – sunaina@image-publicrelations.com                            arastogi@rics.org               

 

 

 

 

Regards
 
Sunaina
Senior Manager
 
Image Public Relations Pvt. Ltd.
2nd Floor, 15 - Community Centre
East of Kailash, New Delhi - 65
Tel no. - 011 - 46523400 ext. 434
Direct Line - 011 - 46523433
Fax no. - 011 - 26410668 / 67
Mobile - 09811645243
email - sunaina@image-publicrelations.com 
  
 
P Please consider your environment: Before printing this e-mail, ask yourself whether you need a hard copy

 

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